Infra output hits 3-yr low in FY18

IN MARCH, infrastructure growth slowed to a threemonth low of 4.1 per cent from a year ago, government data showed. THE GOVERNMENT plans to spend `5.97 trillion rupees ($89.7 billion) on infrastructure in 2018/19 fiscal.

New Delhi, May 1: India’s infrastructure growth slowed to a three-year low of 4.2 per cent in the fiscal year ending in March, indicating Prime Minister Narendra Modi faces a tough challenge to boost investment ahead of general elections due early next year.

Annual output growth was 4.2 per cent during the FY18, lower than 4.8 per cent in the previous year, and dragged down by slower growth in the production of coal, steel and electricity, according to data released by the commerce and industry ministry on Tuesday.

Mr Modi, who is expected to seek a second five-year term next year, has eased several rules and pumped billion of dollars of state funds into building roads, ports, and airports to support economic growth and create jobs.

Analysts say higher borrowing costs and delays in official clearances for projects have hit private investments.

Some 356 infrastructure projects, each costing `1.5 billion or more, had been delayed by up to five years, leading to a total cost overrun of `2.19 trillion, according to government estimates.

Infrastructure output, which comprises eight sectors such as coal, crude oil, natural gas, steel, cement and electricity, accounts for nearly 40 per cent of India’s industrial output.

Steel output growth slowed to 5.6 per cent in the year ending in March from 10.7 per cent in the previous year. Cement output was up 6.3 per cent in same period compared to a 1.2 per cent fall, indicating a pick up in construction activity.